Choosing your Contracting Strategy
Perhaps you are a new entrepreneur about to launch a business or innovation you have been dreaming about for years. Or maybe you have an established business and things are going well, or maybe even too well. In both instances you at some point will need to make a decision what to do yourself and what to have done by others. If a business wishes to grow, it needs to focus on dong it’s core business itself and to have it’s side business done by those who consider such activity their core business.
So now you are writing up your first business contract or touching up bits and pieces from those you have seen flying by in the past, hoping it will contain all necessary provisions and that it will be sufficient professional to close business with clients. But do you have all variables under control? Like the e.g. business model, is it a sale agreement directly with the end-user? Or is it rather a Third-Party-Sales-Channel-model where a variety of resellers, distributors, agents, etc. are your direct customer? And how is the product warranty dealt with á vis these TPSC parties who are not the actual users of your product, and what about provisions for keeping safety stocks or about regularly performing a contract audit with these TPSC parties making sure they meet their contractual obligations?
Alternatively, hiring in-house employees- assuming you easily may find such ‘niche experts’ may take an extra leap once they are onboarded, to have them trained and operational with the right systems available, etc. but what next if business suddenly slows down? Will you have the means to scale-down on your resources? Or will your employment agreement have the flexibility clauses to have your contract professionals re-train or re-educate in another domain required then?